Bangladesh & Economic ZonesGround Reality- Country Perspective Plan 2021

- JICA/JETRO/The World Bank/IFC/DFID

- 100 Economic Zones (purpose)

-Project under Prime Minister’s Office under direct supervision

-BEPZA & BEZA

-Capacity Building of BEZA

-Economic Zones Act 2010, Gazette, MOUs, SROs, etc.

-Accelerated development & aggressive investor promotion

-China Plus 1

-Japanese investments

-BCIM, Greater Role in Asian Region, SAARC Cooperation, etc.

-Land Rehabilitation by Private Land Owners/Industrialists

-Remarkable progress in last 02 years

Economic Zones in Bangladesh

Economic Zones in Bangladesh – Features- Should be a state of the infrastructure – industrial, general, commercial, social, connectivity, etc.

- Sustainability – green cover (landscape, gardening, keeping natural beauty intact, water bodies), application of solar/renewable energy, rain water harvesting, green belt along the boundary, lawns & parks, tree plantation, internal walkways, etc.

- Comply with all development rules and regulations of Bangladesh Government, UNCTAD and other bodies.

- Social review with impacts and mitigation measures.

- Environmental assessment.

- Address resettlement issues in existing land area of the zone, including all future expansions.

- Greater area demographics must be favorable for economic zone.

- Technical site assessment to assess the quality of soil, water supply and other environmental parameters.

- Assessment of required ‘critical’ and ‘good to have’ offsite infrastructure.

Master-plan should include;

Industrial zone: plot (land) and standard factory buildings (as per building codes) for lease /rent for anchor units, ancillary units, QA/QC Labs, R & D Center, value addition centers, etc.

Logistics zone: loading and unloading yards, transportation hubs, cargo handling centers, raw material collection, storage halls, finished goods storage, etc.

Institutional and amenities zone: play school for toddlers, day care center, poly clinic, recreation areas, parks, play grounds, administrative buildings, security station, banks, etc.

Multi-facility complex/utilities: ETP, STP, WTP, SWM, sewer network, communication network, street lighting, wastewater network, electrical substation, etc.

Residential zone: multi-formatted housing, guest houses, etc.

Emergency zone: hospital, fire station, police presence, etc.

Private Economic Zones in Bangladesh – License Process from BEZA

Requirements & Procedure of Application for Private Economic Zone

For Pre-Qualification License

Submit application of Schedule-4 to BEZA.

Information indicated in Schedule-2 with the documents.

One-time non-refundable fee.

A project description of the proposed private economic zone and a list of all activities to be performed within the zone as detailed in the Application Form.

Map regarding construction in the private economic zone, estimated time schedule for starting of work; and any other information and documents which may be considered by BEZA as relevant.

BEZA scrutinizes application within 30 days, with also a site visit.

With approval of the Executive Committee and then the Governing Board, BEZA shall issue Pre-Qualification License to the applicant to develop and operate a private economic zone.

Private Economic Zones in Bangladesh – License Process from BEZA…Continued

For License

Submit second phase application of Schedule-4 to BEZA

Information as mentioned in Schedule 3 and the documents.

One-time non-refundable fee fixed by BEZA.

Feasibility study report with the master plan of proposed private economic zone.

Environmental impact assessment with an environmental management plan.

Resettlement plan (if applicable).

Schedule of approximate time-frame to be spent with the work plan.

Schedule of approximate time-frame for completion of the work.

List of fees to be charged for any goods, services or infrastructure provided,

basically a tariff plan.

Written statement specifying the verified financial resources for the project.

Any other documents which may be considered by BEZA as relevant.

Private Economic Zones in Bangladesh – Incentive Package

Tax holiday up to 10 years.

Duty free import of capital machinery and raw materials.

Duty exemption on exports.

Exemption from dividend tax (after tax holiday is over).

Full repatriation of capital and dividend.

Sub-contracting with DTA allowed.

50% exemption on stamp duty and registration fees.

Exemption of VAT on all utility services.

Exemption of CD for import of vehicles.

No ceiling on FDI.

100% backward linkage raw materials and accessories to

sell for EOI in DTA.

20% sale of finished products to DTA.

Exemption of double taxation subject to double taxation agreement with investors’ country of origin.

Exemption of salary income from income tax for expatriates.

Consideration of EZs as custom bonded area.

FC account for both local and joint venture industries.

Foreign investors to be free to enter any JV.

One stop service for all licenses, approvals, etc.

Tax exemption on royalties, technical fees, etc.

Provision to transfer of shares by foreigners.

Work permits issuance for foreign employees related to any projects.

Re-investment of remittable dividend to be treated as new foreign investment.

Resident VISA for investment of US$ 75,000/- or more.

Citizenship for investment of US$ 500,000/- or more.

Private Economic Zones in Bangladesh – OSS – One Stop ServiceProposal for investmentImport permitExport permitLocal sale permitLocal purchase permitSample permitSub-contract permitPermission for utility connectionNo objection certificate for Off- Shore Banking LicenseLicense for service providerPermission for installation of PGP, WTP, CETPPermission for installation of generator

Name clearanceCertificate of Incorporation/Registration TIN CertificateVAT registrationTrade licenseBuilding plan approvalEnvironment clearanceFire safety clearanceClearance on electrical wiring/plan/connectionClearance on plumbing/water connectionFactory registration with DIFEBoiler registrationCaptive power plant

Visa recommendation Work permitNOC for bank loanCustoms clearance

Private Economic Zones in Bangladesh – Development & Operations Service Offerings

Scope of Work & Deliverables

Approach letter, EOI (Expression of Interest) and first introduction meeting with BEZA (Bangladesh Economic Zones Authority) Chairman and other high officials.

Filling up of BEZA application form for preliminary/prequalification license for the development and operations of economic zone;

-Site visit (site for proposed economic zone)

-Company profile

-Owners’ profile

-Prefeasibility study/master plan (The scope of the pre-feasibility study for the proposed EZ covered benchmarking with leading national and international EZs, assessment of business opportunity and demand analysis in terms of investment flows, land use configuration of proposed EZ,

economic and financial evaluation etc.

-Financial proposal

-Land integration and development proposal

-Marketing proposal

-Unique selling points/features of the zone

Private Economic Zones in Bangladesh – Development & Operations Service Offerings…Continued

Communication and liaison with BEZA officials, IFC/World Bank consultants, arrangement of the site visit by BEZA officials to ensure pre-qualification for the initial license. Approval signature from the PM Office.

Press release in all Bangladeshi newspapers.

MOU with BEZA

Handover ceremony of pre-qualification license for development and operation of economic zone.

All press and electronic media coverage.

Land integration, feasibility study partner preferably international/global or selected Bangladeshi ones for full master plan/business plan/tariff & revenue plan, service

features, etc.

Joint venture partner – to develop and operate the zone according to proposed industry structure in the zone & joint development as well as operations.

Facilitation of all licenses and ‘One Stop Service’ from BEZA

Issuance of final economic zone development and operations license.

Question & QueriesProspect, eligibility and challenge

Minimum requirement of land & infrastructure

Procedure of formation of a body for Private Economic Zone

Procedure of getting approvals & licenses along with timeline

Advantages in Private Economic Zone in tax, duty and other support from Govt.

System of setting tariff

Financial projection for 10 years

Scope of getting foreign collaboration/ JV

Cooperation and support from Privatization Commission

Proposed site at Maizhati, Pakundia, Kishoregonj

Proposed site at Kumna, Chatak, Sunamgonj